Watch on builder carbon rorts

The consumer watchdog has warned building companies to pass on to ­buyers the full amount of industry assistance received by their suppliers, as it investigates allegations of misleading carbon tax claims by builders.

The Housing Industry Association has responded by claiming a tight housing market would limit any price increases in any case.

Last year, the HIA claimed the carbon tax would add over $6000 to the average cost of a house and land, which is about $450,000.

But Australian Consumer and Competition Commission chairman
Rod Sims
said when the assistance provided to emissions-intensive, trade-exposed industries such as glass, cement and steel companies was taken into account, costs would increase only between 0.7 and 1.8 per cent.

He said the ACCC was in the early stages of investigating some building companies over their carbon pricing claims. “We have seen claims that prices of houses will go up 6 per cent," Mr Sims said.

“It is a bit of a mistake of people looking at the materials in the housing industry and not factoring in that they will get compensation. There was a very public campaign by the industry to get compensation, and all we are saying is we will be looking very closely to see whether that is reflected in pricing.

“If a building company misleads people, we can take action," Mr Sims said.

HIA chief executive
Graham Wolfe
said his association had been in discussions with the ACCC, and he agreed the increase in costs of building supplies would be in the 0.7 to 1.8 per cent range due to carbon.

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But the increase to consumers would be higher due to additional costs builders faced, he said.

“It will obviously depend on the size of the house and the material specifications," he said. “We suspect it will be at the higher end of the range. Essentially, they’ll add a couple of percentage points on the costs to consumers."

But he said some building supply companies, which will receive assistance worth 94.5 per cent of their carbon liability, had already informed their customers they would be absorbing the increase in costs from the tax.

“That is because of their exposure to [cheaper] imported products," Mr Wolfe said. “We expect that consumers will continue to see conditions of tight pricing, and we don’t expect people will be passing through prices higher than the reality."

Meanwhile, the federal government has announced dairy farmers could soon be able to earn carbon credits from capturing and destroying the methane released from manure.

Under a draft carbon farming methodology released yesterday, carbon credits could be earned from ­covering manure ponds to prevent release of biogas.